Streamline Health Solutions, Inc. (NASDAQ: STRM), provider of the
eValuator™ Revenue Integrity Program to help healthcare providers
proactively address revenue leakage and compliance exposure, today
announced financial results for the second quarter and first half
of fiscal 2020, which ended July 31, 2020.
Total revenues for the second quarter of fiscal
2020 were $2.9 million, an increase of approximately 16% compared
to $2.5 million in the prior year period. SaaS revenue was up
$254,000, or 46%, over the same quarter a year ago. The revenue
growth during the period was primarily attributable to higher
perpetual revenue and new eValuator customers offset by lower
professional services revenues which were negatively impacted by
the COVID-19 pandemic. Recurring revenue comprised 70% of second
quarter fiscal 2020 revenue compared to 73% of second quarter
fiscal 2019 revenue.
For the first six months of fiscal 2020, total
revenue was $5.7 million, up $78,000 compared to the first six
months of fiscal 2019. SaaS revenue was up $474,000, or 40%, over
the first six months of fiscal 2019. Recurring revenue comprised
72% of revenue for the first six months of fiscal 2020 compared to
69% during the prior year period.
Net loss for the second quarter of fiscal 2020
was ($1.1 million) as compared to a ($0.6 million) net loss during
the second quarter of fiscal 2019. Second quarter fiscal 2020 net
loss included a $28,000 gain from discontinued operations, in
connection with the sale of the Company’s legacy ECM business which
closed February 24, 2020, compared to a $1.0 million gain from
discontinued operations during the second quarter of fiscal 2019.
Gain from discontinued operations was offset by loss from
continuing operations for the three months ended July 31, 2020 and
2019 of $1.2 million and $1.7 million, respectively.
The company recorded $2.5 million of net income
for the six months ended July 31, 2020, compared to a net loss of
($0.3 million) during the same period of 2019. First half fiscal
2020 net income included a $4.7 million gain from discontinued
operations, in connection with the sale of the Company’s legacy ECM
business which closed February 24, 2020, compared to a $2.0 million
gain from discontinued operations during the first half of fiscal
2019. Gain from discontinued operations was offset by loss from
continuing operations for the first six months of fiscal 2020 of
($2.1 million) as compared to ($2.3 million) for the same period in
2019.
Adjusted EBITDA for the second quarter of fiscal
2020 was a loss of ($0.4 million), compared to an adjusted EBITDA
loss of ($1.4 million) in the second quarter of fiscal 2019. For
the six months ended July 31, 2020, adjusted EBITDA was a loss of
($1.0 million) compared to an adjusted EBITDA loss of ($1.7
million) during the first six months of fiscal 2019.
“Our admiration and respect for the country’s
healthcare workers continues to grow as the effects of the novel
coronavirus linger. We remain grateful for their incredible
commitment to the health of the communities they serve,” stated Tee
Green, President and Chief Executive Officer, Streamline
Health.
“We are pleased to report incremental growth of
our eValuator client base during the period, while our management
team continued to successfully control expenses. Our sales team is
gaining traction into a robust prospect pipeline and our reseller
opportunities are expanding.”
“Even with the continuing negative financial
impact the Coronavirus pandemic is having on our industry, the
progress we are making and the performance we are generating builds
our confidence that we are on the right path. With our eValuator
automated, cloud-based, pre-bill coding analysis technology, we
will lead an industry-wide movement to help healthcare providers
improve revenue integrity.”
Highlights from the second quarter ended July 31, 2020
included:
- Revenue for the second quarter of 2020 was $2.9 million; SaaS
revenue was up $254,000 for the second quarter;
- Loss from continuing operations for the second quarter of 2020
was ($1.2 million);
- Adjusted EBITDA for the second quarter of 2020 was ($0.4
million);
- Bookings for the second quarter of 2020 were $2.9 million.
Conference Call
The Company will conduct a conference call to
review the results on Thursday, September 10, 2020 at 9:00 AM ET.
Interested parties can access the call by joining the live
webcast: click here to register. You can also join by
phone by dialing 877-269-7756.
A replay of the conference call will be
available from Thursday, September 10, 2020 at 12:00 PM ET to
Thursday, September 17, 2020 at 12:00 PM ET by dialing 877-660-6853
or 201-612-7415 with conference ID 13708474. An online replay of
the presentation will also be available for six months following
the presentation in the Investor Relations section of the
Streamline Health website, www.streamlinehealth.net.
Non-GAAP Financial Measures
Streamline Health reports its financial results
in accordance with U.S. generally accepted accounting principles
("GAAP"). Streamline Health's management also evaluates and makes
operating decisions using various other measures. One such measure
is adjusted EBITDA, which is a non-GAAP financial measure.
Streamline Health's management believes that this measure provides
useful supplemental information regarding the performance of
Streamline Health's business operations.
Streamline Health defines "adjusted EBITDA" as
net earnings (loss) plus interest expense, tax expense,
depreciation and amortization expense of tangible and intangible
assets, stock-based compensation expense, significant non-recurring
operating expenses, and transactional related expenses including:
gains and losses on debt and equity conversions, associate
severances and related restructuring expenses, associate
inducements, and professional and advisory fees. A table
illustrating this measure is included in this press release.
About Streamline Health
Streamline Health Solutions, Inc. (NASDAQ: STRM)
is a leader in pre-bill revenue integrity solutions for healthcare
providers. Our eValuator™ Revenue Integrity Program includes
integrated solutions, technology-enabled services and analytics
that drive compliant revenue across the enterprise. We share a
common calling and commitment to advance the quality of life and
the quality of healthcare - for society, our clients, the
communities they serve, and the individual patient. For more
information, please visit our website at
www.streamlinehealth.net.
Safe Harbor statement under the Private Securities
Litigation Reform Act of 1995
Statements made by Streamline Health Solutions,
Inc. that are not historical facts are forward-looking
statements that are subject to certain risks,
uncertainties and important factors that could cause actual results
to differ materially from those reflected in the forward-looking
statements included herein. Forward-looking statements
contained in this press release include, without limitation,
statements regarding the Company's growth prospects, estimates of
backlog, industry trends and market growth, results of
investments in sales and marketing, adjusted EBITDA, success of
future products and related expectations and
assumptions. These risks and uncertainties include, but are
not limited to, the timing of contract negotiations and execution
of contracts and the related timing of the revenue recognition
related thereto, the potential cancellation of existing contracts
or clients not completing projects included in the backlog, the
impact of competitive solutions and pricing, solution demand and
market acceptance, new solution development and enhancement of
current solutions, key strategic alliances with vendors and
channel partners that resell the Company's solutions, the
ability of the Company to control costs, the effects of
cost-containment measures implemented by the Company, availability
of solutions from third party vendors, the healthcare
regulatory environment, potential changes in legislation,
regulation and government funding affecting the healthcare
industry, healthcare information systems budgets, availability of
healthcare information systems trained personnel for implementation
of new systems, as well as maintenance of legacy systems,
fluctuations in operating results, effects of critical accounting
policies and judgments, changes in accounting policies or
procedures as may be required by the Financial Accounting Standards
Board or other similar entities, changes in economic, business and
market conditions impacting the healthcare industry generally and
the markets in which the Company operates and nationally, and the
Company's ability to maintain compliance with the terms of its
credit facilities, and other risks detailed from time to time in
the Streamline Health Solutions, Inc. filings with the U. S.
Securities and Exchange Commission. Readers are cautioned not to
place undue reliance on these forward-looking statements, which
reflect management's analysis only as of the date hereof. The
Company undertakes no obligation to publicly release the results of
any revision to these forward-looking statements, which may be made
to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events, except as required
by law.
ContactRandy SalisburySVP, Chief Sales &
Marketing Officer(404)
229-4242Randy.salisbury@streamlinehealth.net
STREAMLINE HEALTH SOLUTIONS,
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
July 31 |
|
|
July 31 |
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Systems sales |
$ |
215,000 |
|
|
$ |
111,000 |
|
|
$ |
215,000 |
|
|
$ |
332,000 |
|
Professional
services |
|
179,000 |
|
|
|
203,000 |
|
|
|
360,000 |
|
|
|
658,000 |
|
Audit Services |
|
463,000 |
|
|
|
354,000 |
|
|
|
1,007,000 |
|
|
|
749,000 |
|
Maintenance and
support |
|
1,228,000 |
|
|
|
1,273,000 |
|
|
|
2,486,000 |
|
|
|
2,725,000 |
|
Software as a
service |
|
802,000 |
|
|
|
548,000 |
|
|
|
1,663,000 |
|
|
|
1,189,000 |
|
Total revenues |
|
2,887,000 |
|
|
|
2,489,000 |
|
|
|
5,731,000 |
|
|
|
5,653,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of systems
sales |
|
125,000 |
|
|
|
27,000 |
|
|
|
202,000 |
|
|
|
91,000 |
|
Cost of professional
services |
|
293,000 |
|
|
|
462,000 |
|
|
|
557,000 |
|
|
|
888,000 |
|
Cost of audit
services |
|
373,000 |
|
|
|
321,000 |
|
|
|
733,000 |
|
|
|
624,000 |
|
Cost of maintenance and
support |
|
182,000 |
|
|
|
176,000 |
|
|
|
368,000 |
|
|
|
303,000 |
|
Cost of software as a
service |
|
379,000 |
|
|
|
140,000 |
|
|
|
761,000 |
|
|
|
247,000 |
|
Selling, general and
administrative |
|
2,284,000 |
|
|
|
2,402,000 |
|
|
|
4,576,000 |
|
|
|
4,823,000 |
|
Research and
development |
|
509,000 |
|
|
|
660,000 |
|
|
|
1,193,000 |
|
|
|
1,249,000 |
|
Executive Transition
Costs |
|
- |
|
|
|
140,000 |
|
|
|
- |
|
|
|
140,000 |
|
Loss on exit of
membership agreement |
|
- |
|
|
|
- |
|
|
|
105,000 |
|
|
|
- |
|
Total operating
expenses |
|
4,145,000 |
|
|
|
4,328,000 |
|
|
|
8,495,000 |
|
|
|
8,365,000 |
|
Operating loss |
|
(1,258,000 |
) |
|
|
(1,839,000 |
) |
|
|
(2,764,000 |
) |
|
|
(2,712,000 |
) |
Other expense: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(13,000 |
) |
|
|
(70,000 |
) |
|
|
(27,000 |
) |
|
|
(148,000 |
) |
Miscellaneous
expense |
|
(64,000 |
) |
|
|
(103,000 |
) |
|
|
(82,000 |
) |
|
|
(119,000 |
) |
Loss before income taxes |
|
(1,335,000 |
) |
|
|
(2,012,000 |
) |
|
|
(2,873,000 |
) |
|
|
(2,979,000 |
) |
Income tax benefit |
|
172,000 |
|
|
|
356,000 |
|
|
|
733,000 |
|
|
|
681,000 |
|
Loss from continuing
operations |
$ |
(1,163,000 |
) |
|
$ |
(1,656,000 |
) |
|
$ |
(2,140,000 |
) |
|
$ |
(2,298,000 |
) |
Income from discontinued
operations: |
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of
discontinued operations |
|
4,000 |
|
|
|
- |
|
|
|
6,013,000 |
|
|
|
- |
|
Income from discontinued
operations |
|
104,000 |
|
|
|
1,406,000 |
|
|
|
241,000 |
|
|
|
2,688,000 |
|
Income tax benefit
(expense) |
|
(80,000 |
) |
|
|
(358,000 |
) |
|
|
(1,576,000 |
) |
|
|
(685,000 |
) |
Income from discontinued
operations |
|
28,000 |
|
|
|
1,048,000 |
|
|
|
4,678,000 |
|
|
|
2,003,000 |
|
Net (loss) income |
$ |
(1,135,000 |
) |
|
$ |
(608,000 |
) |
|
$ |
2,538,000 |
|
|
$ |
(295,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings per Share: |
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.12 |
) |
Discontinued operations |
|
- |
|
|
|
0.05 |
|
|
|
0.16 |
|
|
|
0.09 |
|
Net (loss) income per
share |
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.09 |
|
|
$ |
(0.03 |
) |
Weighted average number of
common shares - basic |
|
30,026,658 |
|
|
|
19,913,658 |
|
|
|
29,897,236 |
|
|
|
19,853,510 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per
Share: |
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations |
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.12 |
) |
Discontinued
operations |
|
- |
|
|
|
0.05 |
|
|
|
0.15 |
|
|
|
0.09 |
|
Net (loss) income per
share |
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.08 |
|
|
$ |
(0.03 |
) |
Weighted average number of
common shares – diluted |
|
30,421,473 |
|
|
|
23,076,807 |
|
|
|
30,229,595 |
|
|
|
22,950,923 |
|
STREAMLINE HEALTH SOLUTIONS,
INC.CONSOLIDATED BALANCE
SHEETS(Unaudited)
Assets |
|
|
July 31, |
|
|
January 31, |
|
|
2020 |
|
|
2020 |
Current assets: |
|
|
|
|
|
Cash and cash
equivalents |
$ |
5,707,000 |
|
$ |
1,649,000 |
Accounts receivable,
net |
|
418,000 |
|
|
2,016,000 |
Contract
receivables |
|
1,193,000 |
|
|
803,000 |
Prepaid hardware and
other current assets |
|
747,000 |
|
|
501,000 |
Current Assets from
discontinued operations |
|
154,000 |
|
|
1,585,000 |
Total current assets |
|
8,219,000 |
|
|
6,554,000 |
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
Property and equipment,
net |
|
101,000 |
|
|
98,000 |
Right of use asset on
operating lease |
|
473,000 |
|
|
- |
Capitalized software
development costs, net |
|
6,263,000 |
|
|
5,782,000 |
Intangible assets,
net |
|
868,000 |
|
|
1,115,000 |
Goodwill |
|
10,712,000 |
|
|
10,712,000 |
Other non-current
assets |
|
1,611,000 |
|
|
611,000 |
Long-term assets from
discontinued operations |
|
42,000 |
|
|
6,826,000 |
Total non-current assets |
|
20,070,000 |
|
|
25,144,000 |
|
$ |
28,289,000 |
|
$ |
31,698,000 |
Liabilities and Stockholders' Equity |
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
121,000 |
|
$ |
756,000 |
Accrued expenses |
|
1,892,000 |
|
|
1,395,000 |
Current portion of term
loan |
|
1,071,000 |
|
|
3,872,000 |
Deferred revenues |
|
3,149,000 |
|
|
3,593,000 |
Royalty liability |
|
1,000,000 |
|
|
969,000 |
Other |
|
195,000 |
|
|
- |
Current liabilities from
discontinued operations |
|
190,000 |
|
|
5,053,000 |
Total current liabilities |
|
7,618,000 |
|
|
15,638,000 |
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
|
Term loan, net of
current portion |
|
1,229,000 |
|
|
- |
Deferred revenues, less
current portion |
|
36,000 |
|
|
55,000 |
Other liabilities |
|
309,000 |
|
|
- |
Total non-current
liabilities |
|
1,574,000 |
|
|
55,000 |
Total liabilities |
|
9,192,000 |
|
|
15,693,000 |
|
|
|
|
|
|
Stockholders' equity |
|
19,097,000 |
|
|
16,005,000 |
|
$ |
28,289,000 |
|
$ |
31,698,000 |
STREAMLINE HEALTH SOLUTIONS,
INC.CONSOLIDATED STATEMENT OF CASH
FLOWS(Unaudited)
|
|
|
Six Months Ended |
|
|
|
July 31, |
|
|
|
2020 |
|
|
|
2019 |
|
Cash flows from continuing
operating activities: |
|
|
|
|
|
|
Loss from continuing operations |
|
$ |
(2,140,000 |
) |
|
$ |
(2,298,000 |
) |
Adjustments
to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Depreciation |
|
|
31,000 |
|
|
|
22,000 |
|
Amortization of
capitalized software development costs |
|
|
651,000 |
|
|
|
236,000 |
|
Amortization of
intangible assets |
|
|
247,000 |
|
|
|
285,000 |
|
Amortization of other
deferred costs |
|
|
153,000 |
|
|
|
136,000 |
|
Valuation
adjustments |
|
|
31,000 |
|
|
|
31,000 |
|
Loss on exit of
membership agreement |
|
|
105,000 |
|
|
|
- |
|
Share-based compensation
expense |
|
|
575,000 |
|
|
|
429,000 |
|
Benefit for accounts
receivable allowance |
|
|
(15,000 |
) |
|
|
(125,000 |
) |
Benefit for income taxes |
|
|
(733,000 |
) |
|
|
(683,000 |
) |
Changes in assets and
liabilities |
|
|
(876,000 |
) |
|
|
(1,108,000 |
) |
Net cash used in operating
activities |
|
|
(1,971,000 |
) |
|
|
(3,075,000 |
) |
Net cash from operating
activities - discontinued operations |
|
|
(2,374,000 |
) |
|
|
3,164,000 |
|
|
|
|
|
|
|
|
Cash flows used in investing
activities: |
|
|
|
|
|
|
Purchases of property
and equipment |
|
|
(34,000 |
) |
|
|
(46,000 |
) |
Capitalization of
software development costs |
|
|
(1,094,000 |
) |
|
|
(1,543,000 |
) |
Proceeds from sale of
ECM assets |
|
|
11,288,000 |
|
|
|
- |
|
Net cash provided by (used in)
investing activities |
|
|
10,160,000 |
|
|
|
(1,589,000 |
) |
Net cash used in investing
activities - discontinued operations |
|
|
- |
|
|
|
(335,000 |
) |
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
Proceeds from term
loan |
|
|
2,301,000 |
|
|
|
1,000,000 |
|
Principal payments on
term loan |
|
|
(4,000,000 |
) |
|
|
(298,000 |
) |
Other |
|
|
(58,000 |
) |
|
|
(14,000 |
) |
Net cash used in financing
activities |
|
|
(1,757,000 |
) |
|
|
688,000 |
|
Net decrease in cash and cash
equivalents |
|
|
4,058,000 |
|
|
|
(1,147,000 |
) |
Cash and cash
equivalents at beginning of year |
|
|
1,649,000 |
|
|
|
2,376,000 |
|
Cash and cash
equivalents at end of year |
|
$ |
5,707,000 |
|
|
$ |
1,229,000 |
|
STREAMLINE HEALTH SOLUTIONS,
INC.New
Bookings(Unaudited)
|
|
July 31, 2020 |
|
|
Three Months Ended |
|
Six Months Ended |
Systems Sales |
$ |
245,000 |
$ |
337,000 |
Professional Services |
|
236,000 |
|
414,000 |
Audit Services |
|
26,000 |
|
35,000 |
Maintenance and Support |
|
283,000 |
|
311,000 |
Software as a Service |
|
2,075,000 |
|
2,773,000 |
Q2 2020 Bookings |
$ |
2,865,000 |
$ |
3,870,000 |
Q2 2019 Bookings (1) |
$ |
3,603,000 |
$ |
4,726,000 |
(1)
July 31, 2019 excludes bookings from the ECM business of
approximately $180,000 for the three months ended July 31, 2019 and
$280,000 for the six months ended July 31, 2019.
Reconciliation of net earnings (loss) to
non-GAAP Adjusted EBITDA (in
thousands):(Unaudited)
Adjusted EBITDA
Reconciliation |
|
Three Months Ended July 31, |
|
|
Six Months Ended July 31, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
Loss from continuing
operations |
$ |
(1,163 |
) |
|
$ |
(1,656 |
) |
|
$ |
(2,140 |
) |
|
$ |
(2,298 |
) |
|
|
Interest expense |
|
13 |
|
|
|
70 |
|
|
|
27 |
|
|
|
148 |
|
|
|
Income tax benefit |
|
(172 |
) |
|
|
(356 |
) |
|
|
(733 |
) |
|
|
(681 |
) |
|
|
Depreciation |
|
17 |
|
|
|
14 |
|
|
|
31 |
|
|
|
22 |
|
|
|
Amortization of
capitalized software development costs |
|
362 |
|
|
|
110 |
|
|
|
651 |
|
|
|
236 |
|
|
|
Amortization of
intangible assets |
|
124 |
|
|
|
142 |
|
|
|
247 |
|
|
|
285 |
|
|
|
Amortization of other
costs |
|
78 |
|
|
|
70 |
|
|
|
153 |
|
|
|
136 |
|
|
|
EBITDA |
|
(741 |
) |
|
|
(1,606 |
) |
|
|
(1,764 |
) |
|
|
(2,152 |
) |
|
|
Share-based compensation
expense |
|
349 |
|
|
|
160 |
|
|
|
613 |
|
|
|
429 |
|
|
|
Non-cash valuation
adjustments |
|
14 |
|
|
|
16 |
|
|
|
31 |
|
|
|
31 |
|
|
|
Loss on exit of operating lease |
|
- |
|
|
|
- |
|
|
|
105 |
|
|
|
- |
|
|
|
Adjusted EBITDA |
$ |
(378 |
) |
|
$ |
(1,430 |
) |
|
$ |
(1,015 |
) |
|
$ |
(1,692 |
) |
|
|
Adjusted EBITDA per
diluted share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share –
diluted |
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.08 |
|
|
$ |
(0.03 |
) |
|
|
Adjusted EBITDA per adjusted
diluted share (1) |
$ |
(0.01 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.09 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average
shares (2) |
|
30,026,658 |
|
|
|
19,913,658 |
|
|
|
29,897,236 |
|
|
|
19,853,510 |
|
|
|
Includable incremental
shares — Adjusted EBITDA (3) |
|
394,815 |
|
|
|
3,163,149 |
|
|
|
332,359 |
|
|
|
3,097,413 |
|
|
|
Adjusted diluted shares |
|
30,421,473 |
|
|
|
23,076,807 |
|
|
|
30,229,595 |
|
|
|
22,950,923 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted EBITDA
per adjusted diluted share for our common stock is computed using
the more dilutive of the two-class method or the if-converted
method. |
(2) Diluted EPS for
our common stock was computed using the if-converted method, which
yields the same result as the two-class method. |
(3) The number of
incremental shares that would be dilutive under an assumption that
the Company is profitable during the reported period, which is only
applicable for a period in which the Company reports a GAAP net
loss. If a GAAP profit is earned in the reported periods, no
additional incremental shares are assumed. |
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